Receivership is an important legal process in New Zealand that occurs when a secured creditor appoints a receiver to take control of a company's assets and affairs. This process is typically initiated by a creditor, such as a bank or financial institution, with the goal of recovering outstanding debts.

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When a receiver is appointed, they assume responsibility for managing the company's assets and operations. Their primary duty is to act in the best interests of the secured creditor, working diligently to maximize the recovery of the debt owed. They operate independently from the company's management and directors, focusing solely on achieving the highest possible return for the creditor.

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Throughout the receivership process, regular communication and transparent reporting are maintained. The receiver provides updates on the progress of the receivership, asset realization, and financial situation of the company to the secured creditor. They also ensure clear communication with employees, suppliers, and other stakeholders, providing clarity and addressing concerns.

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Once the assets have been realized and sufficient funds are generated, the receiver distributes the proceeds to the secured creditor according to the terms of the security agreement. Any remaining funds, if applicable, may be allocated to other creditors.

Receivership empowers secured creditors to recover outstanding debts by efficiently managing and selling a company's assets. It provides a structured and legally sound process that aims to protect the interests of all parties involved while facilitating the repayment of debts owed.